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Yahoo will announce new tools for online advertising today that could pull the company ahead in the race for what is called “behavioral targeting,” that is, the ability to better tailor online advertisements to the people most likely to buy.

The product, Yahoo SmartAds, would help marketers create custom advertisements on the fly, using information on individual buyers and information on real prices and availability from the vendors. For example, a person who had recently searched for information about blenders might see an ad from Target that gives the prices for the blenders that are on the shelves in the store closest to that person’s home.

The Internet has long promised this kind of one-to-one marketing, but it has often been difficult for advertisers to customize display advertisements with a broad reach.

[…] This is how Yahoo’s new system works: the advertiser (or its agency) would provide Yahoo with the components of its display ads — including the logos, tag lines and images. The retailer would share information from its inventory databases that track the items on the shelves in each of its stores. Next, Yahoo would combine that data with the information it has about its users’ demographics and actions online to create a product-specific advertisement.